The Israeli army today said it had been ordered to withdraw from areas in the West Bank and Gaza Strip that are supposed to be under full Palestinian control after the Palestinians declared a unilateral ceasefire.

"The forces which are in Area A, in full control of the Palestinians, will leave these areas completely," the Israeli army said. Forces in the Gaza Strip and West Bank were told to "avoid any attacking activities against the Palestinians".

The orders were given after the Palestinian president, Yasser Arafat, reaffirmed his commitment to a ceasefire and announced the unprecedented step of ordering his security forces not to fire on Israeli troops even in self-defence.

US secretary of state Colin Powell today welcomed the news, saying that he hoped "both sides can take advantage of this encouraging development".

Both sides have come under pressure from the US to work out a truce as Washington mobilises an anti-terrorist coalition in response to last week's attacks on New York and Washington. Continued fighting would disrupt such efforts.

Mr Arafat told foreign diplomats at his Gaza City office that he was committed to a truce with Israel and was doing his utmost to enforce it. He said he has ordered his security forces "to act intensively in securing a cease-fire on all our fronts." Even if his men came under fire, he said, they were to show "maximum restraint."

In response, the Israeli defence minister, Binyamin Ben-Eliezer, ordered a halt to all offensive military operations against the Palestinians, said a ministry spokesman Yarden Vatikay.

"If Arafat really wants to calm the area, we want to help, to give Arafat a chance," said Mr Vatikay, adding that Israel remained sceptical about Palestinian intentions.

Palestinian officials, meanwhile, confirmed that Mr Arafat met the Israeli prime minister's son, Omri Sharon, who has served as a messenger in the past. The meeting came despite statements by the prime minister, Ariel Sharon, that high level contacts could only begin after 48 hours of complete calm.

It was not clear whether the emerging truce would hold. In the past year of fighting, several ceasefire deals have collapsed, with each side accusing the other of being the aggressor.

A senior Palestinian official said the Palestinian leadership hoped to open a new chapter with Israel and suggested that the dramatic events of the past week might have created an opportunity for this to happen.

In the wake of the attacks on New York and Washington, the US has urged Israel and the Palestinians to hold truce talks as soon as possible. Washington is trying to forge an international coalition against Osama bin Laden - the Saudi-born dissident named by the US as its prime suspect for the strikes - but fears that renewed fighting in the Israeli-Palestinian conflict would disrupt its efforts to bring in Arab states.

Responding to the Palestinian announcement, the Israeli foreign minister, Shimon Peres, said he welcomed the "new tone".

In recent days, Israel has stepped up its retaliation against Palestinian shooting attacks on Israelis, with Israeli tanks repeatedly entering Palestinian territory. In the past week, 26 Palestinians and six Israelis have been killed.

Mr Arafat had spoken twice before this week about his willingness to halt the year-long conflict. But Tuesday's announcement was the clearest yet, and reflected an apparent eagerness to be seen as supporting US policy.

Mr Arafat also said that he has informed Washington of his "readiness to be part of the international alliance for ending terrorism against unarmed, innocent civilians".

His emerging shift in policy is, however, likely to renew friction with the Islamist militant groups such as Hamas and Islamic Jihad. Senior clergy linked to Hamas issued a religious edict today saying that those who side with America against Muslims are traitors.